Art dealer faces larceny, fraud charges

Nearly three years after NSW police raided his Sydney gallery, art dealer Ron Coles has been charged over losses of more than $8 million alleged to have been incurred by 43 investors in artworks bought through his Kenthurst and other ­galleries.

The 64-year-old was arrested and charged yesterday with 77 counts of larceny and 10 of cheating and defrauding.

He was granted conditional bail of $200,000 by the Gosford Local Court, half to be paid by him, without security, and the other half secured by an unknown third party.

He did not enter a plea and the case was adjourned to March 15, when he is due to appear in the Parramatta Local Court.

A well-known buyer and seller at art auctions over the decades, Mr Coles specialised in selling art into the self-managed super funds of retirees and others. The superannuation rules meant that in most cases buyers were not allowed to hang these investment artworks on their own walls. Many of the works sold thus remained at Mr Coles’s galleries for safekeeping.

In early 2009 the Sun-Herald broke the story that numerous paintings had been sold to more than one buyer, or were already the property of ­others when Mr Coles sold them to new investors. Some investors launched Supreme Court lawsuits to recover their money.

In January that year NSW Police raided Mr Coles’s galleries at Kenthurst and Middle Dural and seized 408 artworks. Strike Force Glasson was set up by the fraud and cyber crime squad to investigate the complaints of alleged investment fraud.

Mr Coles, who used to drive a Bentley, filed for bankruptcy. The companies associated with his business were put into receivership. He disappeared from the art scene and was at one stage tracked down to the NSW Central Coast, where he was said to be driving taxis.

Related Quotes

Company Profile

Original reports suggested more than $20 million was owed to creditors and that the case involved paintings by many of the big names in Australian art, including
Brett Whiteley
,
Fred Williams
,
Arthur Boyd
,
Arthur Streeton
and Frederick McCubbin.

Works seized by police were worth a small fraction of this and were mostly by lesser-known artists, many by d’Arcy Doyle and Mr Coles himself. It is not known what happened to the high-value works investors said they had paid tens of thousands, and in some cases hundreds of thousands, of dollars for.

More than 150 of the seized works were auctioned off by Graysonline in November 2010 on behalf of the receivers to two of Mr Coles’s companies. They mostly sold for less than $5000 each, many for less than $1000.

Mr Coles was one of many art dealers who rode the boom by selling art to self-managed super funds.

The economic downturn exposed the flaws in a business model that assumed art would keep rising in value and be easily liquidated if need be, and in which buyers did not get possession of the paintings they had paid for.

The Cooper review recommended DIY funds be prohibited from owning art and collectables. The federal government buckled to art industry pressure and proposed that tighter conditions apply to artworks bought as superannuation investments.